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AER versus Gross Interest Rate
el_bandito
Posts: 11 Forumite
Hi
I've read, and felt I understood a useful page on another useful website regarding AER.
However my chart from the Cheshire Building Society tells me that my Cash ISA has an AER of 1.1% and a Tax free interest rate of 2.3%. How can the AER be lower than the gross, and particularly so much lower ?
Confused I am.
I've read, and felt I understood a useful page on another useful website regarding AER.
However my chart from the Cheshire Building Society tells me that my Cash ISA has an AER of 1.1% and a Tax free interest rate of 2.3%. How can the AER be lower than the gross, and particularly so much lower ?
Confused I am.
0
Comments
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Just a thought. Could this because the AER isn't allowed to include the 1.8% introductory bonus ?0
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More likely your bonus has less than a year to run.
0.5% plus 1.8% for a year would be an AER of 2.3%.
0.5% plus 1.8% for 4 months (1.8 x 4 / 12 = 0.6) would be 1.1%.0
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